(1)
Definitions. For purposes of this rule, the following
definitions shall apply:
"3(c)(1) fund" means a qualifying private
fund that is eligible for the exclusion from the definition of an investment
company under the Investment Company Act of 1940 (15 U.S.C. Section 80a-3(c)(1)).
"Private fund adviser" means an investment
adviser who provides advice solely to one or more qualifying private
funds.
"Qualifying private fund" means a private
fund that meets the definition of a qualifying private fund in SEC Rule
203(m)-1 ( 17 CFR 275.203(m)-1).
"Value of primary residence" means the fair
market value of a person's primary residence, less the amount of debt secured
by the property up to its fair market value.
"Venture capital fund" means a private fund
that meets the definition of a venture capital fund in SEC Rule 203(1)-1 ( 17
CFR 275.203(1)-1).
(2)
Exemption for private fund advisers. Subject to the additional
requirements of subrule 50.45(3), a private fund adviser shall be exempt from
the registration requirements of Iowa Code section
502403.
if the private fund adviser satisfies each of the following conditions:
a. Neither the private fund adviser nor any
of its advisory affiliates are subject to a disqualification as described in
SEC Rule 262 of Regulation A (
17 CFR
230262 .).
b. The private fund adviser files with the
state each report and amendment thereto that an exempt reporting adviser is
required to file with the SEC pursuant to SEC Rule 204-4 (
17 CFR
275204-4 .).
c. The private fund adviser pays any
applicable fees.
(3)
Additional requirements for private fund advisers to certain 3(c)(1)
funds. In order to qualify for the exemption described in subrule
50.45(2), a private fund adviser who advises at least one 3(c)(1) fund that is
not a venture capital fund shall, in addition to satisfying each of the
conditions specified in paragraph 50.45(3)
"b," comply with the
following requirements:
a. The private fund
adviser shall advise only those 3 (c)( 1) funds (other than venture capital
funds) whose outstanding securities (other than short-term paper) are
beneficially owned entirely by persons who, after deducting the value of the
primary residence from the person's net worth, would each meet the definition
of a qualified client in SEC Rule 205-3 (
17
CFR 275205-3 .) at the time the securities
are purchased from the issuer.
b.
At the time of purchase, the private fund adviser shall disclose the following
in writing to each beneficial owner of a 3(c)(1) fund that is not a venture
capital fund:
(1) All services, if any, to be
provided to individual beneficial owners;
(2) All duties, if any, the private fund
adviser owes to the beneficial owners; and
(3) Any other material information affecting
the rights or responsibilities of the beneficial owners.
c. The private fund adviser shall obtain on
an annual basis audited financial statements of each 3(c)(1) fund that is not a
venture capital fund and shall deliver a copy of such audited financial
statements to each beneficial owner of the fund.
(4)
Federal covered investment
advisers. If a private fund adviser is registered with the SEC, the
adviser shall not be eligible for this exemption and shall comply with the
state notice filing requirements applicable to federal covered investment
advisers.
(5)Investment
adviser representatives. A person is exempt from the registration
requirements if the person is employed by or associated with an investment
adviser that is exempt from registration in this state pursuant to rule
191-50.45 (502) and does not otherwise
act as an investment adviser
representative.
(6)
Electronic filing. The report filings described in paragraph
50.45(2) "b" shall be made electronically through the IARD. A
report shall be deemed filed when the report and the fee required are filed and
accepted by the IARD on the state's behalf.
(7)
Transition. An investment adviser that becomes
ineligible for the exemption provided by rule
191-50.45 (502) must comply with
all applicable laws and rules requiring registration or notice filing within 90
days from the date the investment adviser's eligibility for this exemption
ceases.
(8)
Grand fathering
for investment advisers to 3(c)(1) funds with nonqualified clients. An
investment adviser to a 3(c)(1) fund (other than a venture capital fund) that
has one or more beneficial owners who are not qualified clients as described in
paragraph 50.45(3)
"a" is eligible for the exemption contained
in subrule 50.45(2) if the following conditions are satisfied:
a. The subject fund existed prior to November
6, 2013;
b. As of November 6, 2013,
the subject fund ceases to accept beneficial owners who are not qualified
clients, as described in paragraph 50.45(3)"a";
c. The investment adviser discloses in
writing the information described in paragraph 50.45(3)"b" to
all beneficial owners of the fund; and
d. As of November 6, 2013, the investment
adviser delivers audited financial statements as required by paragraph
50.43(3)
"c."
This rule is intended to implement Iowa Code section
502.403.
